The journey from

Farm to Fuel
(As on November 2022)

Ethanol procurement / blending under

EBP programme increased from Ethanol production capacity
38 crore litres in ESY 2013-14 to 433.6 increased more than 2.5 times
crore litres in ESY 2021-22. and no. of distilleries increased
by 66% in 8 years.

Ethanol blending %age increased

from 1.53% in ESY 2013-14 to 10.0% Government has allowed use
in ESY 2021-22. of damaged and surplus food
grains for ethanol production.

Oil Marketing Companies (OMCs) paid

distillers nearly ` 81,796 crore towards
ethanol supplies, enabling timely Multimodal transportation of
payment to farmers in last 8 years. ethanol & ethanol blended petrol by
Oil Marketing Companies (OMCs).

CO2 emissions lowered by

OMCs have signed Long Term
318.2 lac ton in last 8 years. Offtake Agreements (LTOAs) to set
up Dedicated Ethanol Plants (DEPs).

Cumulative foreign exchange

impact due to Ethanol Blended
Petrol (EBP) programme is
estimated over `53,894 crores.
Friends,

Ethanol was rarely discussed in the country about 7-8 years ago. But now ethanol
has become one of the major priorities of the 21st century India. Considering the
achievements in the previous few years and acknowledging the public support,
Government has decided to advance the target of 20% ethanol blending in petrol by 5
years from 2030 to 2025. Apart from sugarcane, modern technology based ethanol
plants are being set up across the country to convert agricultural waste to ethanol.

Focus on ethanol has impacted the environment as well as life of the farmers
positively. During 2013-14, 38 crore litres of ethanol was being purchased, which has
increased more than 10 times to 408 crore liters in ESY 21-22. In ESY 21-22
approximately `25,750 crore of ethanol was purchased, a large sum of which has
gone in the pocket of our farmers. It has especially benefitted the sugarcane farmers.

Ethanol also helps in mitigating the challenges of sales and storage associated with
over-production of foodgrains and sugar. Mitigating all such challenges is in the
interest of the farmers for which ethanol is important.

Shri Narendra Modi

Prime Minister
CONTENTS
India’s Rising Energy Concerns.........................................1

Molasses Plant Process Flow /........................................ 2

Grain Plant Process Flow

Ethanol Blended Petrol (EBP)

Programme - Challenges ................................................3

Ethanol Blended Petrol (EBP)

Programme - Stimulus ....................................................5
Effects of Landmark Reforms .......................................... 8

A Farmer's Journey from an

‘Annadaata’ to ‘Urjadaata’................................................ 11

The Future Landscape of Opportunities................................13

An Integrated Bio-Refinery Model....................................14

Testimonials................................................................... 16

Abbreviations and their full forms ..................................18

India’s Rising
Energy Concerns
India is the world’s third largest energy consuming nation and
a significant part of India’s energy requirement is met through
oil which continues to rely largely on imports. India’s share in
global energy consumption is set to double by 2050. A rising
energy demand and high reliance on import poses significant
energy security challenges. It also leads to massive foreign
currency outflow. Further, excessive use of fossil fuels leads to
higher carbon emissions and associated health concerns.
Domestically produced ethanol is a potential opportunity to
reduce reliance on oil imports by blending it with conventional
fossil fuels for consumption.
India started blending ethanol in petrol on a pilot basis in
2001. The ethanol was produced as a byproduct during the
process of making sugar from sugarcane. However, despite
potential, no significant progress was made under the ethanol
programme and the production of ethanol remained stagnated
until recently when transformative reforms were carried out.
The results are set to help not only the economy but transform
farmers’ income and recharge the rural economy.

1
Molasses Plant Process Flow
Molasses

CO2

Fermentation

Vinasse Conc Vinasse

Distillation Evaporation Incineration

Boiler

Extra Neutral Fuel Grade Support Fuel

Alcohol/ Alcohol
Perfumery
Dehydration

Grain Plant Process Flow

Flour Slurry Mash CO2

Grain Grain Slurry Liquefaction Fermentation

Handling Preparation
& Milling

Thin Stillage

Distillation Decantation Evaporation

DDGS
Fuel Grade
Alcohol
Dehydration
2
Ethanol Blended Petrol (EBP)
Programme - Challenges
EBP was launched in January 2003. In 2006, the Ministry of Petroleum
and Natural Gas directed the Public Sector Oil Marketing Companies
(OMCs) to sell 5% EBP in 20 states and 4 UTs. Even though the
programme started early it faced multiple inherent challenges leading
to slow adoption and growth. But the programme did not meet success.

Limited availability of feedstock

(raw material)

Non-utilisation of existing grain-based

ethanol distillation capacity

Limited ethanol distillation capacity

3
 Procurement challenges due to infrastructural and
operational issues

Constraints on the part of State Governments

Dissatisfactory ‘take home’ price and irregular

pricing for ethanol suppliers

High taxation on ethanol, rate of 18% applicable

No clear Roadmap for higher ethanol blending in India

The programme was implemented only in limited states and UTs till
2019 excluding north eastern states and the entire state of J&K and
Ladakh. Further, there was no long term visibility for the EBP
programme. Thus, the investments in the sector were meagre leading to
unsatisfactory performance.

4
Ethanol Blended Petrol (EBP)
Programme - Stimulus
The Government under the leadership of Hon’ble Prime Minister
Shri Narendra Modi, in line with its Energy security, climate change
and rural economy enhancement goals initiated multipronged
reforms to boost Ethanol usage in the country.

Dec Re-introduced administered price mechanism for

2014 ethanol to be procured under the EBP Programme.

Opened alternative route for ethanol production (2nd

Dec
Generation including Petrochemicals), directed Oil
2014 PSEs to set up bio-refineries.

ESY Tendering processes simplified – Multiple EOI,

2014-15 transportation slabs and rates.

IDR Act Amendment on 14th May 2016 to clarify on

May the roles of Central and State Government for
2016 continuous supply of ethanol to be blended with
petrol under EBP Programme.

Regular Interaction with states and all other

ESY
stakeholders to address issues regarding the EBP
2016-17 Programme - this is an ongoing process.

June Notified forward looking and updated National

2018 Policy on Biofuels – 2018 involving all stakeholders.

5
 Interest Subvention Scheme to improve and increase
July ethanol production capacity in the Country. Government to
2018 provide interest (interest subvention), for a period of 5 years.
GST on ethanol lowered from 18% to 5%.

Allowed conversion of B heavy molasses, sugarcane juice

and damaged food grains to ethanol. Fixed differentiated
ESY ex-mill ethanol price and sourcing of raw material utilised for
2018-19 ethanol production given priority. Marked beginning of
differentiated ethanol pricing, based on raw material utilised
for ethanol production.

April Extension of EBP Programme to the whole of India except

2019 the Island UTs of Andaman Nicobar and Lakshadweep.

Sept New sources sugar & sugar syrup introduced for ethanol
2019 production at fixed remunerative price.

Oct Published “Ethanol Procurement Policy on a long term

2019 basis under EBP Programme”.

August One time registration of ethanol suppliers for long term,

2020 including giving them visibility of ethanol demand for 5 years.

Further ease of tender conditions by Oil Marketing

Companies (OMCs) like one time document submission,
quarterly bank guarantees, multiple transportation rate
slabs and transportation rates being linked to Retail Selling
Oct Price (RSP) of diesel, reduction in security deposit and
2020 applicable penalty on non-supplied quantity etc. Approval of
National Biofuel Coordination Committee (NBCC) to utilise
surplus stock of rice lying with Food Corporation of India
(FCI) to be released to the distillers for ethanol production.

6
 Nov Approval of NBCC to utilise maize for ethanol
2020 production.

Jan Included grain-based distilleries under interest

2021 subvention scheme for capacity expansion.

Feb Introduced multimodal transportation of Ethanol &

2021 Ethanol-Blended Petrol (EBMS) to ethanol deficit states.

June
Roadmap for ethanol blending in India 2020-25.
2021

Jan Long Term Offtake Agreement (LTOA) signed with 131

2022 project proponents to set up dedicated ethanol plants.

June
Amendment to National Policy on Biofuels 2018
2022

Oct
Separate price for Maize based ethanol
2022

Oil Marketing Companies (OMCs) increased their ethanol

storage capacity from 5.39 crore litres in November 2017
Nov to 34.4 crore litres till November 2022, thereby providing
2022 ethanol storage cover of over 20 days at their depots.
Amount spent by OMCs is approximately `750 crores –
this is an ongoing process.

Expression of Interest for signing Long Term Offtake Agreements

with upcoming Dedicated Ethanol Plants is a proactive step to
motivate project proponents to set up ethanol plants in deficit
states, thereby paving the way forward for the nation in achieving
the ethanol blending target of 20% and more in the coming years
- Shri Hardeep Singh Puri
Minister for Petroleum & Natural Gas of India
on 18th September 2021

7
Effects of
Landmark reforms
Ethanol blending % has increased more than 6 times in last 8 years
450 10% 10%

400 9%
8.10%
8%
350
7%
300
6%
250 5%
5%
200 433.6 4%
150
2.33% 302 3%
100 1.53% 2%
173
50 1%
67.4
38
0 0%
2013-14 2014-15 2019-20 2020-21 2021-22

Ethanol Supply Year (ESY)

Ethanol Supplied / blended Ethanol Supplied Blending % (Figures in Crore Litres)

Remunerative prices of ethanol to suppliers have more than doubled in

last 8 years-a major boost to farmers’ income
63.45
56.87 59.08

46.66 52.92

25.12

(Prices in Rs/lt.)
PRIOR TO 2014 2021-22
C Heavy Molasses B-Molasses/Partial sugarcane juice 100% sugarcane juice
DFG/Maize FCI Rice
A new era of differentiated ethanol pricing, based on feed stock utilized for
ethanol production started in 2018-19. Higher prices fixed for ethanol
from all feedstocks for ESY 2022-23.

India’s ethanol story is one of enormous grit and

perseverance. From just 1.5% target from 2005-14, we have
moved from 1.5% to 10% blending during 2014-22. It is a
unique initiative which combines energy security,
environmental well being and rural prosperity.
Shri Hardeep Singh Puri,
Minister for Petroleum & Natural Gas

8
 Ethanol distillation capacities of molasses-based distilleries
increased more than 2.5 times and number of distilleries increased
by 66% in 8 years
619

Number of distilleries
262
Distillation capacity
215 (crore litres/annum)
157

2013-14 2021-22

Ethanol Storage capacity has increased more than 6 times

from 2017 to 2022
35 34.4
30
25
20
15
10 5.39
5
0
2017 2022 (Figures in Crore Litres)

Ethanol %age contribution from different feed stocks

0.7 2.5

11.2
12.9 13.0 5.5

12.97
19.7
100 61.1
60.5

2017-18 2020-21 2021-22

C Heavy Molasses B Heavy Molasses SCJ/Sugar/Syrup DFG/Maize Surplus Rice From FCI

Movement by Railways
(Figures in Crore Litres)
0 0.19
Upto Dec 2020 Upto Dec 2020
7.6 91.99
Jan 2021 Onwards Jan 2021 Onwards

Ethanol Ethanol-Blended Petrol (EBMS)

The decision to allow diversion of sugarcane & grain-based feedstocks for

ethanol production since 2018-19 enabled reliable supply of feedstocks
and price stability for farmers.
9
Protecting economic interest of farmers
Under EBP, Oil Marketing Companies (OMCs) have paid sugar mills nearly
`81,796 crore for ethanol supplies in the last seven years, which has helped
mills to clear farmers’ dues. Additionally, decision is taken to buy damaged and
surplus food grains for ethanol production, ensuring price value for surplus grain
stock as well as accommodating the fresh season crop to meet EBP target.

Reduced Import Bill and increasing self-reliance

The cumulative foreign exchange impact due to EBP Programme is estimated
over `53,894 crores during 2014 to November 2022.

Lowered CO2 emissions, cleaner environment

One Crore litre of ethanol blended petrol can save around 20,000 tons of
carbon dioxide (CO2) emission. Greenhouse gas emissions due to the
EBP Programme were reduced by 318.2 lac tons during 2014 to November
2022.
Encouraging Ease of
Doing Business through Technology
The IDR Act implementation enabled State Governments to avoid
complicated documentation procedures and conduct pro-business
activities like e-approvals, online permits, electronic locking, GPS
tracing of vehicles carrying ethanol etc. thereby shortening the overall
process and reducing time to help the business.

The flag off news of Ethanol Blended Motor Spirit (EBMS)

Tank Truck from Bongaigaon Refinery will be a milestone of
the National Biofuel Policy in the North Eastern region.

Rameswar Teli,
MoS for Petroleum & Natural Gas
17th August, 2021

10
A Farmer's Journey from an
‘Annadaata’ to ‘Urjadaata’

I have heard that now,

farmers like me can also be a
Urjadaata and increase their
income. They can also help in
conserving the environment.

Amritrao, you heard it right,

Ethanol produced from
sugarcane and now even
from food grains like wheat
and rice is in high demand
for mixing in petrol by Oil
Companies.

11
 With the Government fixing
remunerative ethanol prices,
there will be sustained demand
for your crops. This will ensure
you get the right price and timely
payment for your produce.

You mean to say, now,

more number of vehicles
will be running with
Yes ethanol mixed petrol
produced from
sugarcane and food
grains?

So, I have become Urjadaa-

ta from Annadaata. That’s
great, now, I can dream of a
good future

12
The Future Landscape of
Opportunities
Ethanol Industry is expected to grow by 500%
By 2025, at 20% blending level, ethanol demand will increase to 1016
crore litres. Therefore, the worth of the ethanol industry will jump by over
500% from around `9,000 crore to over `50,000 crore.

Ethanol distillation capacity to double to 1,500 crore litres annually

• Financial assistance scheme introduced by DFPD during 2018-2022 to
increase ethanol production capacity.
• Long term offtake agreement signed to establish 431 crore litres per
annum of dedicated ethanol capacity.
• Estimated 165 LMT of surplus grain to be utilized annually from 2025
to produce ethanol which would result in estimated 42,000 crore
payment to farmers.
• Launch of new vehicles compatible to run on E20 fuel from 2023 and
flex fuel vehicles from 2024.
This will attract new investment and create employment opportunities.

Enhanced production of 1G ethanol from various feed-stocks

will help in achieving blending targets of ethanol with petrol
apart from promoting ethanol as an indigenous, non-polluting,
environment friendly & virtually inexhaustible fuel.

Shri Hardeep Singh Puri,

Minister for Petroleum & Natural Gas

13
An Integrated
Bio-Refinery Model
The concept of an integrated Bio-Refinery model or Bio-park is
being envisioned which will encompass integration of the
following facilities:
1. 2G Ethanol plant: Second Generation or 2G ethanol plant can
convert agricultural residues like rice straw, wheat straw, energy
crops etc. to ethanol. With around 160MMT of surplus agricultural
residues generated in India annually, 2G ethanol plants offer
significant opportunity in India. A 100 kl per day plant can utilize 2
lakh tonne per annum of agricultural residue to generate around 3
crore litres of ethanol per annum.

2. Grain based 1G Ethanol Plant: Grain based First Generation or 1G

Ethanol Plant can convert the starch present in grains like rice, corn
etc. to ethanol. Some by-products like CO2 & Dried Distillers Grains
with Solubles (DDGS) are also generated which can generate
additional revenue. A 100 kl per day 1G plant is estimated to incur
capital expenditure of around `170 to 200 crores with a land
requirement of approximately 20 acres.

3.CBG Plant: Compressed Bio Gas (CBG) or Bio-CNG can be produced

from agricultural residue, Municipal Solid Waste (MSW), cow dung
etc. CBG can easily replace CNG. The bio-manure produced in the
plant is an additional source of revenue. The estimated capital
expenditure for a 15 tonne per day CBG plant is around Rs.60-100
crores, depending on the feedstock and the land requirement of
approx. 15 acres.

4. Production of Chemicals: Production of bio-chemicals in the

Bio-refinery will improve its economics significantly. Some
technologies for production of bio-chemicals are ready for
commercialization while many are still in development stage.

14
5. Cogeneration Plant: Setting up of a Cogen plant by using Lignin
(generated in 2G plant) & Biogas (CBG plant) can ensure continuous
& reliable power supply to the Bio-Refinery.

Some of the advantages of Integration of various plants in a

Bio-Refinery are:

• Improved economics with reduced cost of feedstock and

sustenance of biomass supply-chain on long term basis. With the
setting up of 1G, 2G and CBG plants in the same premises, there can
be a common source/agreement for supply of grains (for 1G
Ethanol Plant) and supply of waste straw/agricultural residue
generated (feedstock for 2G/CBG Plants).

• Optimization of common resources like Utilities (Cooling tower,

Boiler, ETP etc.) & Offsite facilities (tankages, loading Gantry,
firefighting system etc.) can reduce capital expenditure.

• Integration of 1G ethanol and CBG plants with established & proven

technologies can bring in economic viability & sustainability of the
Bio-Refinery since 2G ethanol technologies are still in the maturing
stage.

• Optimization of Equipment Spares & Manpower required for

Operation / Maintenance of the plants.

15
Abbreviations
and their full forms
Abbreviation Full Form
% Percentage
DFPD Department of Food and Public Distribution
EBMS Ethanol Blended Motor Spirit
EPP Programme Ethanol Blended Petrol Programme
EOI Express of Interest
ESY Ethanol Supply Year (period from December of a
year to November of the following year)
FCI Food Corporation of India
GST Goods and Services Tax
IDR Act Industries (Development and Regulation) Act
NBCC National Biofuel Coordination Committee
NPB-2018 National Policy on Biofuels - 2018
OMCs Oil Marketing Companies
pa Per annum
PSEs Public Sector Enterprises
UTs Union Territories
LTOA Long Term Offtake Agreement
DEP Dedicated Ethanol Plant

16